Wheatstone LNG production delayed

Australia’s 8.9 million tonne a year (mta) Wheatstone LNG is to delay its first production to next summer, having originally planned a late 2016 launch, raising the project’s costs yet again.

Project partner Woodside announced the delay in a statement issued this weekend. Project leader Chevron Australia had previously announced that the project was 65 per cent complete and on track to send out its first cargoes by year-end.

Chevron’s Barrow Island-based, 15.6 mta, US$54 billion Gorgon LNG project is due to produce its first volumes within weeks.

Australia-based analyst Macquarie suggests that the delay will increase project costs from US$23 billion to US$33 billion, making Pilbara, Western Australia-based Wheatstone the fourth most expensive project due to come to market in 2013-2019.

Term buyers for the project include the Japanese utilities Tokyo Electric, Chubu Electric, Tohoku Electric, Kyushu Electric Power and China’s Huadian, which will take 1mta from 2020. Chevron Australia claims to have committed “around 85 per cent” of its equity LNG from Wheatstone “to premier LNG buyers”.

Australia is poised to overtake Qatar and Malaysia to become the world’s leading producer of LNG by 2019. However several projects have been pushed back, deepening their spiralling costs.